SEM experience to date and the impacts for the future

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SEM experience to date and the impacts for the
future

• Sean McGoldrick, General Manager SEMO

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SEM Overview
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Mandatory Pool
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Timeframes
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Electricity Market High Level Overview
D4
Weekly
D-2
D-1
D
D1
MP
Financially Settle Position
Review Position
Follow Control Instructions
Submit Bid Offers
Provide final Meter Data
Provide available Meter Data
Meter
Publish Forecasts
Run System Real Time
TSO
Produce Indicative Schedule and Price
Initial Daily Schedules, Prices and Settlement
Collect Real Time Data
Invoice Weekly Position
Indicative Schedules, Prices and Settlement
SEMO
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Participants in the SEM

• 45 Participants have registered in SEM
• 31 Participants have registered Generator Units
• 10 Participants have registered Interconnector
  Units
• Registered Capacity in the Market 9856 MW

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Some Participants
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Market Share Trend Generators
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Market Share Trend Suppliers
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SEM Financial
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CashflowGenerator Unit in SEM

• Energy Payments
• Paid System Marginal Price (SMP) for energy
  scheduled by the market in each half hour
• Settled on a weekly basis
• Capacity payments
• Paid for available capacity in each half hour
• Settled on a monthly basis
• Other payments
• Constraint payments (/-) If TSO dispatch
  differs from market schedule
• Uninstructed imbalances (/-) If metered
  generation doesnt correspond to dispatched
  output
• Make Whole Payments () If costs incurred are
  not recovered through other market payments
• All settled on a weekly basis
• Other charges
• Currency Charges (Weekly Monthly)
• Market Operator charges (Weekly variable,
  Monthly fixed)
• Unsecured Bad Debt charges
• Generator Under test charges

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CashflowSupplier Unit in SEM

• Energy Charges
• Pay System Marginal Price (SMP) for energy
  consumed (MWh) in each half hour
• Settled on a weekly basis
• Capacity Charges
• Charge based on consumption of energy (MWh) in
  each half hour
• Used to pay Generator Units for capacity
• Settled on a monthly basis
• Other charges
• Imperfections charges Charge per MWh of energy
  consumed
• Currency Charges
• Market Operator charges

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System Marginal Price by Trading PeriodJanuary
2008 to August 2008
Tightly Banded!
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Financial Summary

• SEMO will process Energy Payments of
  approximately 4/3 Billion annually
• A further 600/461 Million in Capacity Payments
  annually
• The market remains fully collateralised
• It holds collateral, in the form of Letters of
  Credit and Cash deposits, from supply companies
  of approximately 320/246 Million
• It prices the market and processes payments in
  two currencies (Euro and Sterling)
• To date SEMO has processed over 800/615 Million
  in payments
• 800 Million in, 800 Million out, with 1 day
  turnaround between
• SEMOs annual operating cost, including
  depreciation, is 25/19.2 Million

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SEM IT
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IT Systems

• The SEMO IT systems provide a modern, open,
  e-business, n-tier platform architecture to
  provide maximum scalability, availability,
  resilience, performance, reliability and
  stability to enable mission critical operations
  for the SEM
• The key components of the solution are
• -  Market Interface System provides the
  interfaces for information exchange with the SEM
  systems i.e. interaction with Market
  Participants, Meter Data Providers, and System
  Operators
• -  Market Applications System that provides the
  scheduling and pricing mechanisms
• -  Market Settlement System that provides the
  meter data management, settlement, and billing
  and invoicing functions
• -  Finance System that provides financial
  processing capabilities including credit
  management and electronic funds transfer

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IT Systems

• The SEMO corporate and market systems consist of
  approximately 120 servers across two sites
  (Belfast Dublin). 
• There are also a large number of applications,
  backup devices, storage devices, communications
  equipment and other peripheral equipment.
• The systems are fully redundant across two
  separate locations connected by 2 high speed
  dedicated links.
• The systems can be run entirely at either
  location or a mix of both locations.
• The main systems were delivered by 3 independent
  vendors with in excess of 30 smaller vendors
  supplying hardware, software and other systems.

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IT Capabilities
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SEMO Website
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SEM Future
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Development potential

• Financial Market
• Physical trading remains the same
• Players CFDs outside pool
• Currently, there are Directed Contracts and
  Non-Directed Contracts
• Greater liquidity required
• SEM lightly interconnected to BETTA
• Moyle HVDC 500MW Import 80MW Exporttechnically
  capable of 500MW export

• Future interconnectors planned
• Regulated EirGrid 2012
• Merchant Imera 2011
• Both aim to be commissioned by 2012
• Explicit Auctions
• Moyle and EirGrid short and medium term
• Imera long term

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Expansion/IntegrationOptions

• A. Unified Pan-European solution employing a
  centrally legislated and harmonised approach.
  Significant change from the present approaches.
• B. Horizontal Integration Market regions
  progressively merge, developing and sharing more
  efficient coupling mechanisms and leading to
  fewer, larger market regions.
• C. Dome Coupling where a central entity or
  function is created to determine efficient flows
  between the coupled market regions (that each
  utilise their own mechanisms to resolve
  inter-regional flows and market prices).
• 7 Regions
• France, UK, Ireland
• SEM has linked NI and ROI
• Integration with UK and France?

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SEM/BETTA Comparison
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SEM/BETTA Comparison cont.
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SEM/BETTA Comparison cont.
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Future of SEM

• Greater Coupling with BETTA
• Facilitates larger/faster penetration of
  renewable energy in both markets
• Integration and creation of an All
  Islands/Regional Market
• Return to a Bilateral Market?
• Market share of incumbents reduced
• Less transparent
• Greater Competition in retail and wholesale
  markets?
• Both Generation and Supply arms in energy
  companies
• Extension of Gross Mandatory Pool?
• Significantly increased collateral requirement

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Summary
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SEM Experience to Date

• The market has been launched on time and within
  budget
• The Market has operated successfully in its first
  11 months
• A number of major software releases have been
  successfully put into production without
  interfering with the market schedule
• 13 new participants have joined the SEM since
  market launch
• Market Development continues (Over 150
  Modifications considered since market launch,
  single design authority, redesigned website,
  market system development plan in place)

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Further Details

• Thank You
• Questions Welcome
• For further details on the Single Electricity
  Market please see
• www.sem-o.com